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Fiscal Treaty Megathread [Poll Reset]
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Sigh. No, he didn't. He advocated a full guarantee of everybody bar shareholders, and he welcomed the guarantee the following day as a 'masterstroke'.
He wasn't responsible for implementing the guarantee - obviously, that credit rests with the two men who made the decision - but he certainly advocated exactly the guarantee that was put in place.
cordially,
Scofflaw
He said he didn't, you telling me he's lying?
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Battered Mars Bar wrote: »He said he didn't, you telling me he's lying?
September 21st 2008: http://www.davidmcwilliams.ie/2008/09/21/state-must-act-as-a-safeguardThe fourth option is the most attractive one, but it hasn’t been tried anywhere and would demand a leap of faith from the authorities. Remember what we said before: the two critical elements are time and confidence. The single most persuasive route to take would be for the Irish government to guarantee all deposits in Irish banks. Yesterday’s announcement of a €100,000 deposit guarantee only goes half the way.
In contrast, a full guarantee would have meant full protection for all creditors, all our own deposits and those of the foreign institutions who have lent to the Irish banks. The government could do this for a limited period - let’s say two years.
Straight away all uncertainty would disappear. The deposits, of which there are close to €300 billion, would become sovereign. Peoples’ fears would be assuaged and, if done properly, it would not cost a penny.
"Cheapest bailout in history".
And on the announcement: http://www.davidmcwilliams.ie/2008/10/01/lenihans-masterstroke-has-bought-us-time-to-sort-out-our-own-problemsWe are not out of the woods by any stretch of the imagination. Indeed, some Irish banks have been so recklessly managed they hardly deserve to be covered by the guarantee.
Finance Minister Brian Lenihan has made a wise choice. By coming up with a unique, Irish plan — guaranteeing all deposits — instead of importing a failed solution from abroad, he has instilled confidence in the Irish financial system.
Most importantly, Irish banks are now safe. This is the single most crucial upshot of yesterday’s move.
...
In time, Brian Lenihan’s move yesterday will be seen as a masterstroke and a practical blueprint for the new financial architecture which will emerge from this global crisis.
His attempts to get out of this rely on his original imprecision of language - as far as I know, he claims that he only meant a deposit guarantee. Since he describes the deposit guarantee as only going "halfway", says "all creditors" and "foreign institutions who lent to our banks", as well as referring to the "deposit side of the banks' balance sheets", it's clear he meant everyone, as we can also see from this piece on the 29th September 2008: http://www.davidmcwilliams.ie/2008/09/28/state-guarantees-can-avert-depressionWhile, in the longer term, Irish banks have bad debts/asset problems due to excessive lending to property, the problem that will drive them to the wall is short-term liquidity. This is what the state must rectify. We have seen from the US that the policymakers are making it up on the fly, hoping that by buying up toxic assets (bad debts), they can insulate the system and buy time.
Misidentifies the main issue as being liquidity - check.However, as we can see from the rolling bankruptcies, this is not working – or, at least, only partially so. The challenge for Ireland is to come up with our own rescue model and then export it, rather than wait for some manna to arrive from heaven to solve our banking dilemma.
Unilateral Irish move - check.The only option is to guarantee 100 per cent of all depositors/creditors in the Irish banking system. This guarantee does not extend to shareholders who will have to live with the losses they have suffered. However, it applies to everyone else.
Guarantee everybody bar shareholders - check.If the minister does this, he will not only staunch any funds outflow, he will show leadership and be seen as someone who is coming up with a solution that can be copied all over the world.
This will be so great - check.Ireland in the past has done things that no other country has done, to great effect. Think of the zero tax rate on exporters in the 1970s and the 12.5 per cent tax rate on multinationals now.
These were solo initiatives – we didn’t wait for them to work in other countries, and they worked perfectly well here. This proves that we can think for ourselves. Once more, and possibly even more crucially, we need to think for ourselves now. Furthermore, the state could charge the banks a 0.25 per cent fee for the guarantee, thus making about €1.5 billion per year in revenue (0.25 per cent of €500 billion).
If we take second-hand, discredited ideas from abroad, such as a toxic fund or, worse still, nationalising a bank, we will fail. If we fail, our banking system will be imperilled and a generation of Irish people will suffer. A failed banking system is equivalent to a failed state, and Ireland will become an international pariah. No politician can or should survive such a mistake.
We shouldn't use models from abroad - check.
So, two years blanket guarantee for everyone bar shareholders, not using a model from abroad, banks not to be nationalised, misidentified main issue as liquidity, cheapest bailout possible. And that's what happened.
cordially,
Scofflaw0 -
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I have to say I love the logic on the RTE website:
http://www.rte.ie/news/2012/0531/fiscal-treaty-referendum.html
"During the recent spell of good weather there were worries a sunny day might reduce turnout, however it is the opposite problem in many parts of the country as rain kept polling slow"
So if the turnout is low and its sunny its the fault of the sun. If the turnout is low and its raining its the fault of the rain. No doubt if it was cloudy RTE would blame the clouds.
its nothing to do with disillusionment over the political situation in the country or anything.0 -
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It's pretty logical. Weather like the start of the week would've kept turnout down, same if it starts pissing rain now. Sadder that the weather makes a difference but it does and it does just about everywhere in the world.I have to say I love the logic on the RTE website:
http://www.rte.ie/news/2012/0531/fiscal-treaty-referendum.html
"During the recent spell of good weather there were worries a sunny day might reduce turnout, however it is the opposite problem in many parts of the country as rain kept polling slow"
So if the turnout is low and its sunny its the fault of the sun. If the turnout is low and its raining its the fault of the rain. No doubt if it was cloudy RTE would blame the clouds.
its nothing to do with disillusionment over the political situation in the country or anything.0 -
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